tv Bloomberg West Bloomberg August 30, 2016 6:00pm-7:01pm EDT
influence u.s. elections this fall. >> those kinds of things are things that we take seriously and work very hard to understand so we can equip the rest of our government with options how to deal with it. mark: his remarks came as senate minority leader harry reid asked the fbi to investigate the threat of russian tampering with the u.s. elections. spokesman for islamic state is dead. he was reportedly killed while surveying the groups defenses in aleppo, syria. if then lawmakers says u.k. wants the advantages of the european union's single market, it will have to pay into the eu's budget. non-memberway is a but contributes to the blocks finances in return for market access. poll shows hillary clinton
leading donald trump in pennsylvania. libertarian gary johnson is at 6%. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. i'm mark crumpton. "bloomberg west" is next. emily: i'm emily chang and this is "bloomberg west." harshestnds apple's penalty ever, ordering them to cough up $14 billion. but will -- will the world's richest company pay? is europe putting the tech giant on notice? he's the godfather of online usgging -- as williams join on a conversation from everything on the freedom of
internet in the future of publishing. and making tech m&a history -- dealo close a mega-head after was rubberstamped by chinese regulators. but first to our lead -- european regulators slam apple with a 14.5 lien dollar tax bill, far and away the largest tax will in a crackdown on so-called sweetheart deals. -- 14.5 billion dollars. in this case, ireland, it's corporate tax rate is the lowest in western europe and has attracted more than 700 u.s. companies to set up shop, including google and facebook. apple employees about 6000 people in ireland but the eu competition commissioner says ireland allowed apple to pay an effective tax rate of 1% on .005%an profits down to
in 2014 and that gave apple an unfair advantage. withshe is in an interview bloomberg earlier. >> that tax rate in ireland is 12.5% and obviously, most companies at the national or taxinational level pay the rate or corporate tax rate in ireland and they have to look at some companies in case apple only pays a tiny, tiny fraction a themselves have to pay. that is obviously not fair competition. it is not a level playing field. the irishspoke to finance mr. -- finance minister. but first, i want to bring in matt larson who has been doing a as well as our bloomberg news reporter who covers apple for us.
we knew apple was going to appeal, but what was the response from the company? alex: that they are not happy. i think a lot of people were surprised about the scale of the back payment date are going to have to come up with. this agreement has been put in place since 1991 and it was always legal. they never used any illegal loopholes that the agreement they had was such that it was above board. emily: we have a letter from tim cook to users, including the original pictures of steve jobs at the factory in ireland. alex: he went along and opened a plant in cork. apple, as ever, they talk about the customer and not journalists. who is writing the story, of course, the journalists. apple in ireland will
appeal this to the general court in luxembourg. it's the court early hearing the appeals in the starbucks netherlands investigation and the fiat chrysler case, both of which are significantly smaller but could give some indication into how this appeals court may take the decisions. this whole process is going to take two years at least to determine and after that, there are further opportunities to appeal to even higher courts in europe. it's going to be quite a while before we get a decision in these cases. been: the u.s. has stepping up its defense apple, calling the eu a supernatural tax authority, indicating they are overstepping their bounds. what did we hear from the united states government today? alex: i think you have to be careful about calling it a defense of apple. they are interested in ensuring he taxes paid in the u.s.
every dollar apple pays and taxes overseas is deductible from the tax they might have to pay should they have to repatriate their fund. emily: we mentioned that apple is fighting this ruling. ireland is fighting this as well. why would ireland want to collect $14 billion from the richest company in the world? mark barton spoke to michael noonan earlier and pointed out the opposition party in ireland would like to see just that. mark: why do you just accept money and shut up? money.lion is a lot of guest: i have a responsibility for devising the government on these matters. this has rescued ireland from 2011 on and from the creation of high level jobs, it's
fundamental to our economic policies and we stand by our economic policies and we're going to protect our economic policies. we are not going to get into a situation of short term gain for long-term damage to the economy. standing his ground there. what kind of long-term advantage are we talking about? yesterday, heard people were saying on a scale of one to 10, 10 being extremely damaging, 23. ireland has 140,000 people employed by u.s. tech companies is they start to be put at risk and it ceases to be the place where companies might go if they go to europe. about 180 ilion euros in debt, so this will go toward paying that off. why should i subsidize apple to
have 5500 jobs in ireland? emily: you've been looking at the tax structure other companies have. do any of them have this similar arrangement? companies make use of ireland -- we think about it as the austin, texas of europe. they've developed favorable tax laws related to transfer pricing. as a result, you have a lot of companies that have organizations, subsidiaries set up in ireland that have transfer pricing arrangements in place. life science from a cynical companies that have significant operations. favorable tax laws and favorable treatment for other tax system treats these pricing
agreements. it's a little bit of a warning shot and may encourage some companies to take a look at tother maybe they negotiated suite a deal or take a look at corporate structures and how their overall setup is working for them. how about companies like google or facebook which have egg bases in ireland and are based in all of europe -- big aces in ireland. matt: a lot of companies have headquartered there. -- fidelityypal, ea investments even has significant operations there. of theseare one organizations, you have to take a very close look at how your taxation is working, not just in the revenue you are sending but what are the communications you have had with the tax authorities?
it's not just here is our revenue, take a percentage of it. looking at company transfers and deals amongst the subsidiaries. you have to take into account what the basis is there and what percentage you are applying to that base that is going to be taxed. i think companies will have to take a look at the way there internal operations look and look at the deals they have struck with irish tax authorities. emily: apple shares ending today slightly down. how did esters react? alex: they are relatively blase about it. it's 6% of their cash reserves. the thing investors want to see is the ability to repatriate the money to the u.s. because they want to get it in the form of dividends and buybacks. it's not the end of the world for them. emily: our bloomberg news
reporter and our bloomberg intelligence litigation manager. we will continue to follow these stories very closely. coming up, our guest host for the rest of the hour, ed williams joins us. the cofounder of twitter -- avenue williams joins us. our social media networks becoming too powerful and where does digital publishing go from here? stay with us. this is bloomberg. ♪
, from themselves online founding blogger which he sold to google, he focused on podcasting and from there, a side project that he called twitter was born. he remains on the board of directors. he started medium as a way to publish posts longer than twitter's character limit. here with me for the hours -- the hour, evan williams. i want to start with medium because you play a tremendous role in how we publish online and express ourselves online. medium is your vision for the future. give us an update on where it is and where it's going. medium is a place to write stories and ideas. it's meant to be open to anyone and anyone who has something of say -- something to say of substance to find their audience. it's an a on blogging or social
media but it is focused on things that tend to be longer. it's used by both amateurs and professionals. toryone from the president individuals with stories to tell. obama, bono,ent hillary clinton -- you have publishers like bill simmons, betweenthe balance amateurs, influencers and publishers? isn: we think the mix important and makes the conversation better. the entire point of medium is, unlike a standalone website, you are in the mix. your ideas bounce around with other people. you can respond and highlight and people can find you. one of our mottos is great ideas can come from anywhere.
to writing, there are tens of individuals with unique perspectives and ideas and the ability to articulate them. we offer a place to do that. it is where a business leader can write something and a customer can respond. because there's the diversity of voices, you get much more insight. emily: it is beautiful, simple and elegant. where are you on monetization? evan: we are working on growing the monetization peace right now. really making it work for individuals. now, we are focused on enabling professionals which means getting them paid. publishing and
toking with the publishers tell their stories and gain audiences to the stories. some publishers are implementing our substitution program as well so you can create a pay wall. that's looking good but it's in its early stages. tim kaine responded and mitt romney announced why he's not running for president on medium. how does that come about? do you have a team of people trying to get hillary to post on medium? what's the play-by-play? evan: we have an outreach team that's a white love service team and they help get the ball rolling. it has taken on its own momentum. in dce or inre if you want to find
in audience, medium becomes the default for that. it really has gotten this momentum now and people from that world read it. if you have something to say, there is -- you go there and say it. mentioned there is one person who has not posted on medium and that is donald trump. are happily open to what he would have to say but so far he has not chosen to expand much beyond his 140 characters in writing. taken fineas advantage of twitter. he seems to prefer expressing himself in 140 characters. what has that been like watching trump take off on twitter? evan: kind of the same as
everyone. a mixture of the wildermuth and and fear. -- bewilderment and fear. it has been fascinating, especially most recent revelation that his tweets were, you could distinguish his tweets from his staff by looking at the source. years ago, when we held in that ability to see the source, we did not picture that reticular use case but i'm glad it's there. fair" had aty provocative article that said silicon valley created donald trump. do you think silicon valley or that without twitter, trump would be not where he is? us to takeld hate to the credit or the blame for that. it's a result largely of our media ecosystem which has tremendously good and bad things.
when i started working on the internet, i was excited anyone could that their voice out there and i thought the world is going to be smarter, wiser, when the truth is out there and unfettered, the reason i'm still working in this area is that i realize it not as the blas that. the tremendous amount of noise has not made us or in many ways, it has made us dumber. they're so much we have to do on top of this system to take full , we stillas a society have a lot of work to do. emily: you have monday of high-profile tech ceos saying that they are against trump. where do you stand? evan: i am firmly against trump. emily: how do you, as someone who has old multiple platforms for free speech, how do you balance your clinical views with your responsibility to the
platform? we just saw this, in the section that they deemphasized conservative stories. not unfriendly against all republicans. i'm proud that both on twitter and on medium, we have told that an equalt are giving side. we have many senators and congresspeople and about an even mix on both sides. in fact, in our outreach team, we employ an equal number of people who reach out to the right and left. there's nothing in her system that biases one side against the other. created a healthy exchange and i read and recommend viewpoints from both sides. because they are on the same form, i think people are more open to them.
emily: bloomberg had a scoop today that donald trump wants to start a media business. evan: i think that would be very smart of them. i think there will be an audience. what do you think? emily: he seems to be getting a lot of interest. evan: maybe he could cohost. emily: evan williams, we will be speaking with you about the next hour. thank you so much for joining us. still ahead, we will continue our deep dive with my cohost looking at the future of medium and twitter. this is bloomberg. ♪
soon they will be able to control their speakers from amazon at go. a long-term partnership marks a major pivot for the company. they've maintain the tightest possible control over the software its listeners used to control their speakers. next week -- the company received clearance to go ahead with the deal that would bring to leading providers on data center and corporate computing acquitted together as they chase faster growth. month on close next the seventh. the combined company will begin operating under the new name dell technologies. still to come, more of our exclusive conversation with ev williams. we will talk about how his gumby's shape the future of how we talk about ourselves. the radio -- you can listen on the bloomberg
her management of the brazilian budget. deadlyims of last week's earthquake in italy were honored at a state general today. an italian bishop said that town and neighboring towns must be rebuilt because abandoning them would kill them a second time. the death toll from the quake is at 292. the state department says about 30 e-mails regarding the benghazi attack have been recovered by the fbi. they are among the thousands of hillary clinton e-mails uncovered during the bureau's investigation into the former secretary of state's use of a private server. the agency says it needs until the end of september to review them before they are released. president obama short the sentences of 111 federal inmates convicted of nonviolent drug offenses. the white house says mr. obama has granted 673 commutations,
more than the previous 10 presidents combined. i'm mark crumpton. this is bloomberg. it's 8:30 wednesday morning in sydney. paul allen joins us with a look at the markets. paul: the trading day is 30 minutes old and new zealand and it's not moving much. indicate a similar inconsequential gain when we start trading. we have some data out of japan. that's expected to show a gain for a second straight month, though slowing from the 2.3% we saw in june. its first will get chance to react to big tank earnings at china as well.
that was in line with estimates. they saw their first decline in the bad loan ratio since 2012 and wrote off $6.3 billion in bad loans, up 35%. bank with second-quarter profits up to 6.9 billion, beating estimates despite the bank setting aside a larger buffer for bad loans. at some of what we are watching around the region today. i'm paul allen for bloomberg tv in sydney, australia. emily: this is "bloomberg west." i'm emily chang. medium has become the place where people post longer and
in-depth pieces -- president obama, bill gates and bono are just a few of the people who have used this forum to share their thoughts with the world. the former leader of now bankrupt gawker just posted her thoughts. cofounder ofe medium and twitter, evan williams. i is supposed she posted this on medium because the idea is you can't take it down. on peter thielke versus gawker? is that going too far or fair play? evan: four gawker or peter thiel? emily: either. evan: it's scary for the press. especially if unknown sources of money are fighting you. and of everything gawker did but in general, i'm a fan of freedom of the press. i think it is critical.
avail,ely, gawker should but it would be a bad thing if random media sites can be taken out by people who don't like what they say. a question you deal with behind-the-scenes -- what is free speech? what counts as fair? what is going too far? i'm sure when you started blogger, there were trolls and online harassment. it seems like nothing has changed. evan: it has gotten worse, for sure. the early days of the internet, it was a little better and we club and if's a big you are there, you are welcome and we have dinner parties with our front door open. if you stop by, everyone is glad to see you and so much has evolved with that default framework. the idea that anyone can join any conversation is not
something we expect in the real world. because so many wonderful things come from online, there's a lot of desire to hold onto to that ability and yet it causes so much problems when you open it up to the massive society. to cracky is it hard down on online harassment and quiet the trolls? evan: because the line is fuzzy. when you dig in, it seems much easier from the out side then when you look at the details. would givee rhetoric you the impression that twitter or other services don't do anything. there's a huge team focused on this and delete stuff all of time. what is tricky is where the line it's blurry and we want to thend free speech and allow principle of free speech, you have to defend free speech
you've if you don't agree. it's all legal requirement because twitter is a private entity, it is a value that we hold that people should be able thoughts even if it is unpopular. the policies and tools are evolving, but it is not a trivial issue. we acknowledged a couple of years ago and i think even from the earliest days, we would have thought about different architecture had we known how severe this issue would get. it really has gotten a lot worse and the of the vitriol severity of the attacks people suffer. the architecture of the service is a lot of what allows a lot of
great things and does allow the bad things but i think there are things you can do. i met with the team working on this and there's a bunch of smart people who are going to be improving it soon. emily: you are the cofounder of twitter, you've been the biggest champion of twitter, this is a company with a market cap high of $20 billion and now it's $13 billion. do you think it can get back to those heights? i can't make any real statements being a board member of twitter. speaking,stractly it's an incredibly large and valuable service. the thing that twitter provides, the real-time information layer is valuable and can be a lot more valuable. it's a matter of innovation and
development and there's not an asset like twitter in the world in terms of the individuals and world leaders and entertainers the information created on a daily basis. there's so much more that can come out of that. i'm an optimist in general. emily: what is your faith in jack evan:? my faith is high and jack. i fully support them. you can only go so far. we've seen a lot of m&a. do you see twitter remaining an independent company? evan: no comment on that. position a strong right now and as a board member, we have two consider all the options. medium is almost a complement to twitter but is almost the opposite of twitter. it's more in-depth.
do you see them as potentially opposite? evan: in some ways. hard of my reason for working on twitters in -- while grew and facebook evolved and all these other social media plot forms took an increasing , they stilltention all pointed to and talked about nonsocial media. journalism was still incredibly important and people are consuming more and more, but it hasn't evolved as much. they are incredibly complementary, even though they are very different. is more of a distribution vehicle for more
substantive content than it is somewhere where you expand ideas or offer more complex stories. andmedium is complementary that's the reason i work on mediums. emily: we're going to talk more about the future of the internet and where you see it going. quickly, i do want to talk about uber and target's chief operating officer joining uber as vice president of ridesharing. the ceo described how marketing will integrate into uber's ground operations after the alphabet chief officers stepped down from uber's board. alphabet and uber are heading into competition with google piloting its own with its wave
emily: welcome back. we still here with evan williams, cofounder of twitter and founder of medium. we are joined by brad stone. you had a hand in shaping the web as we know it. the growth of the internet is something you have talked about and you are a multi-time author. have socialstion, networks become too big?
too: i don't think they are big in general. scale is hard. we're not used to being connected to thousands of people and we're not used to discussing things among the of people or people we don't know. social networks have always existed and they have never been as big as they are online. from a power in business perspective, size helps, the defensiveness, the value of social networks rose with the size. brad: more advertising dollars are funneling in and people's attention is funneling to these platforms. are we losing some of that wonderful openness of the cost to and is there a the dependence on a handful of platforms? evan: there is for sure a cost
and as the inevitable trajectory we are on. a few major platforms, if you rotten it from social networks to media platforms and syndication platforms, almost as a law of nature, it is to centralize -- it is going to centralize and consolidate. emily: what about the mobile web in particular? these are the companies that decide what apps we use and it's a small number that we spend a lot of time on. is the internet actually becoming smaller? it is becoming more closed, for sure. any of us who develop software or the internet, thinking back to even 10 years, we would have had to get our software approved before we release it to customers and that feels like a step act words terms of openness and development. getxchange, you infrastructure and all kinds of
things that help. : not to raise the tar baby of net neutrality, but you have companies like t-mobile releasing these unlimited plans and that raises another host of questions for our we getting in the guise of free, getting access to some of the internet ?ut not all of it evan: i don't know where it's going to go but the idea that this was built as a highly decentralized platform and was crucial, yet the paradoxes of -- most of theor valuable things on the internet are centralized platforms or market late-season and once you create one of those, you get an increase in your returns. you say the internet is
more like tv than we think. what do you mean by that? evan: my current obsession is how do we up the quality of media on the internet in the way tv has evolved in the last years? the feed we are all used to is like turning on the tv and flipping channels. often lots of good stuff that you want, it's not very intentional what you consume. it's whatever catches your attention at the time whereas -- thisust like video, but experience of show me some stuff. whereas tv has evolved and we sit down and we look at our dvr limitedix and we have a selection of highly curated shows. as a result, those shows have gotten higher quality and tell more complex stories and you
consume them from beginning to end. the business models have improved as well. the mechanism matters a lot. the ability ford dvr's and that has changed the business model of the content. i think it's early days in content and media on the internet and if we can invent the new distribution and consumption models, we can change everything. apple, googlesee and facebook getting bigger and companiesr will other break through and we just can't imagine it? emily: in the last eight years of the obama administration, you had very weak antitrust enforcement. i guess the question is whether that changes in the next administration? we've seen some pushback, even
today in europe on large technology companies. that's probably a big part of it and these companies get more and more successful and powerful because people love their services. we are in the age of the feed because people love the feed. we all this traffic coming from the facebook's and snapchat's of the world. to the extent we buy new models, companies like medium has to that have a grip. emily: you say the internet is like a city. brad: there's this migration that's similar to the migration to urban areas which is going to happen over several decades and the percentage of the world that lives in urban areas and is projected into 2050 is going to
be a majority of people. trade-off.t's a you trade flex ability, you trade openness and the ability to do whatever you want on your only an. if you live in a city with , thes to culture and ideas same thing happens online. these companies build consolidation and you bump into people and you trade the same thing. emily: evan williams, cofounder of twitter and ceo of medium. brad stone, thank you for stopping by. i want to take a look at one story that is out of this world -- spacex is preparing to cross another milestone. to take preparing flight with one of its recycled rockets. they will send their indications satellite into orbit on a previously flown falcon rocket. they have not announced what it
emily: now to a story trending today -- kim.com has won the right to live stream his appeal against his extradition to the u.s. livestream is online showing becoming zen goings at the courthouse. this after a new zealand judge ruled the founder of megaupload can stream the corporate seedings. he's facing conspiracy, racketeering and money laundering charges and potentially decades in jail. he took to twitter saying i will post a live streaming link asap.
this is breaking new ground, new zealand at the forefront of transparent justice. twitter cofounder evan williams is still with me. something also trending on classic tags which lets people share advice under the hash tagged "i tell my teen self." i believe we have some video of you from the early days talking about the internet. evan: really? emily: that's not you. have, given everything you and through, what would you tell your teen self? evan: talk to the girl. moved to california sooner. trust your gut. emily: anything about starting
it company? evan: do that. it worked out fairly well. but i did have any problem with that. do more sooner. emily: what advice do you have for aspiring entrepreneurs and people who are too scared to take the risk you took? peoplehat i usually tell when i start talking to them is simplify and focus. you can break anything down and it's great to have the grand vision but it is surprising how successful you can be and how big something can be if you zoom in on it. there are still millions of opportunities in the world and often, you don't see that because you are looking to broadly and if you narrow your focus, you can find surprising world like we did with twitter. emily: why do you keep creating?
why aren't you sitting on a beach? why are you talking to me question require you doing the start of thing all over again? evan: i don't know. i was compelled to work on medium because the work wasn't done. there's still so much potential in using the internet to help each other and help each other with ideas. of ourwer to most problems are already here but they are in someone else's head. they don't have this great system for getting it out of your head. you can find that video of evan williams when he was 15-year-old talking about the internet. evan: you don't have to. ♪